Top Medicare Doctor Paid $21 Million in 2012, Data Show

Dr. Salomon Melgen examines a patient at his office in Port St. Lucie, Florida, on March 21, 2013. Photographer: Mark Elias/Bloomberg

April 9 (Bloomberg) -- A doctor who treats a degenerative
eye disease in seniors was paid $21 million by Medicare in 2012,
twice the amount received by the next ophthalmologist on a list
of 880,000 medical providers released by the government.

The data on the payments was given to the public for the
first time today by the Centers for Medicare and Medicaid
Services. The list, a detailed account of how $77 billion in
federal health-care funds were spent in 2012, showed a wide
range in which some top earners were paid as much as 100 times
the average for their respective fields.

Consumer groups have long urged the release of data showing
Medicare’s true cost to taxpayers, saying it could help
highlight fraud, while doctors’ groups argued against the
release of raw payment data, saying it may lead patients to jump
to the wrong conclusions.

“When I was prosecuting Medicare fraud cases years ago, it
was often difficult even for us as prosecutors to get Medicare
data in a timely fashion,” said Jay Darden, a partner at Patton
Boggs LLP in Washington who left the Department of Justice in
2010. “So the notion that now it’s not only being released, but
released to the public, that could very well signal a
recognition from CMS that it’s had a problem in the past and it
needs to do something about it.”

Two doctors listed, who together were paid about $30
million, spent time in court in 2013 on claims they defrauded
the government. While Medicare fraud cases aren’t unusual, the
data released will provide a new level of transparency into the
agency practices that may force doctors to become more careful
in how they bill for Medicare patients.

64 Times Average

Salomon Melgen, a Florida ophthalmologist who has been
linked to a criminal probe involving U.S. Senator Robert
Menendez, was paid $20,827,341 in 2012, or 64 times the average
in his field, the data show. His appeal of a 2009 ruling that
found he overbilled Medicare by $8.9 million was rejected last
year. Farid Fata, a Michigan oncologist was paid $10,063,281 in
2012, was charged with Medicare fraud in August, according to
court records. The data opens fresh questions about Medicare’s
payment policies.

“Deterring improper payments is a top priority of CMS in
order to protect beneficiaries and taxpayers,” said Aaron
Albright, a CMS spokesman. The agency “is working with our
contractors to develop an appropriate cumulative payment
threshold that considers costs, as well as potential benefits in
determining which claims and providers should be selected for
further scrutiny.”

Kirk Ogrosky, a former federal prosecutor who now
represents Melgen’s company, said U.S. officials who combat
fraud shouldn’t be looking at raw payment amounts alone.

‘Billed in Conformity’

“At all times, Dr. Melgen billed in conformity with
Medicare rules,” Ogrosky said, referring to his client’s legal
situation before the release of the 2012 data, which was given
to media organizations with the agreement it wouldn’t be
disclosed before this morning.

Fata, in jail since his arrest in August, has pleaded not
guilty to the charges against him, according to court records.
His attorney, Christopher Andreoff of Southfield, Michigan, said
he hasn’t seen the CMS report and declined to comment. CMS,
meanwhile, won’t comment on any data involving individual
doctors, according to spokesman Albright.

The American Medical Association yesterday warned that the
release of raw payment data without proper perspective on it may
lead patients to the wrong conclusions.

AMA Concern

“The AMA is concerned that CMS’s broad approach to
releasing physician payment data will mislead the public into
making inappropriate and potentially harmful treatment
decisions, and will result in unwarranted bias against
physicians that can destroy careers,” Ardis Dee Hoven,
president of the Chicago-based group, said in an e-mail.

Some of the numbers may be inaccurate and doctors haven’t
been given a chance to review the data and make corrections,
Hoven said in a telephone interview.

Providers in a large practice group could bill all their
services under one name, Albright said.

The listings, when seen in aggregate, offer insight into
doctors’ billing practices across a variety of specialties.

Melgen and Fata were among seven individual providers who
received more than $10 million from Medicare in 2012, the data
show, and the top 25 doctors totaled $231.7 million from the
program. Among the top 25 physicians, 12 were ophthalmologists,
six were oncologists and eight lived in Florida, the only state
to appear more than three times in the top-ranking list.

Twice as Much

Melgen, based in West Palm Beach, was the highest-paid
doctor, according to the listings, with reimbursements that were
twice as much as the next highest paid ophthalmologist,
Alexander Eaton of Fort Myers, Florida. Eaton, paid $10,726,482,
was the fifth-highest paid.

While Melgen made twice that of Eaton, half as many
patients were served through his offices, according to the CMS
listings. He saw 894 people compared with Eaton’s 2,721.

Melgen, 59, has been in the spotlight since 2009 when U.S.
officials ruled he overbilled Medicare the previous two years
for injections of a drug for age-related macular degeneration.

Melgen lost an appeal before the Medicare Appeals Council
in June 2013, and sued in August in federal court in Miami
seeking to overturn the decision. Last month, attorneys for his
company, Vitreo Retinal Consultants of the Palm Beaches PA,
urged a judge to reverse the decision, arguing the ruling wasn’t
backed by substantial evidence and that the doctor’s billing
practices were appropriate, according to court papers filed
March 27.

Senator Menendez

Melgen also has been at the center of a criminal probe into
whether Menendez, the chairman of the Foreign Relations
Committee, improperly helped the doctor in a Medicare-billing
dispute. The doctor, who has described his relationship with the
senator as “like brothers,” said in interviews with Bloomberg
News in April 2013 that his companies never benefited from the
20-year friendship and that he broke no laws.

A grand jury last year examined whether Menendez intervened
in Melgen’s billing dispute with the U.S. Department of Health
and Human Services. The criminal probe became public in late
January 2013 when agents from the HHS and the Federal Bureau of
Investigation raided Melgen’s offices over two days in West Palm
Beach, Port St. Lucie and Delray Beach.

Tricia Enright, a spokeswoman for Menendez, declined to
comment on the Justice Department’s investigation.

Suspended Payments

HHS notified Vitro of a suspension in Medicare payments in
letters dated Aug. 20 and Aug. 23, 2013, lawyers for the company
said in court papers filed Oct. 18. HHS agreed Oct. 29 to lift
the suspension after Melgen said the company was no longer
billing Medicare for multidosing Lucentis, the injection for
macular degeneration, according to a joint court filing.

Fata, who owns and operates at least six oncology centers
under the name Michigan Hematology Oncology PC, was arrested in
August on charges he submitted false claims to Medicare for
medically unnecessary services. Fata billed patients in
remission for chemotherapy, deliberately misdiagnosed patients
as having cancer to justify chemotherapy and fabricated
diagnosis as reasons for ordering hematology treatments,
prosecutors said in court papers.

Delayed Treatment

Fata also allegedly delayed emergency treatment for some
patients with serious medical conditions until he could
administer and bill for chemotherapy. In one instance, a patient
with potentially fatal low sodium levels was given chemotherapy
before being taken to an emergency room and hospitalized,
prosecutors said.

The data released today showed that Fata received $10
million in Medicare payments in 2012, making him the highest
paid oncologist out of 7,374 providers in his field.

Fata has been jailed since his arrest after prosecutors
successfully argued the doctor, a Lebanon native who became a
naturalized U.S. citizen in 2009, is inclined to flee and has
the means to do so. Fata and his wife have a taxable estate
worth more than $40 million and more than $14 million in mostly
liquid assets, prosecutors said last year. The oncologist’s
trial is set for August.

Other doctors that were highest paid included Asad Qamar, a
cardiologist based in Ocala, Florida, who was paid $18,154,816
by Medicare in 2012. The next-highest cardiologist was paid
$4,499,469.

Qamar serves “a heavily concentrated Medicare population
by providing a variety of state-of-the-art cardiovascular
interventional procedures and services to patients with advanced
peripheral vascular arterial disease,” Tracy Mabry, Qamar’s
lawyer, said in an e-mail. He added that all of Qamar’s Medicare
claims “are subject to thorough pre-payment review of
supporting medical documentation.”

Million Services

The third- and fourth-highest paid doctors, Michael
McGinnis and Franklin Cockerill, both pathologists, were paid
$12,577,017 and $11,068,463 respectively in 2012.

Cockerill, who is based in Rochester, Minnesota, billed for
56,628 unique patients in the year, providing more than a
million services. McGinnis, based in Wrightstown, New Jersey,
saw 33,154 patients. The two doctors received more than twice
the amount of the third-highest paid pathologist, who received
about $5 million in 2012 for 8,976 patients.

McGinnis said his provider code was used for about 27
doctors at Plus Diagnostics in Union, New Jersey, where he is
the medical director.

Administrative Work

“I don’t really work directly at the facility, I’m doing
administrative work,” McGinnis said in a telephone interview
today. Referring to today’s data release, he added, “I’m not
offended by it, but it’ll need to be interpreted correctly so
the wrong ideas and wrong statements won’t be made.”

Cockerill, who is the chairman of the Mayo Clinic
Department of Laboratory Medicine and Pathology and a lab
director, is in a similar situation, Mayo Clinic spokesman Bryan
Anderson said in an e-mail. “His name is listed as the billing
physician for claims submitted for payment under the clinical
lab fee schedule,” Anderson said.

Cockerill’s lab performed more than 23 million lab tests in
2013, said Anderson, and he is a salaried physician.

The Melgen case is Vitreo Retinal Consultants of the Palm
Beaches PA v. Kathleen Sebelius, 13-22782, U.S. District Court,
Southern District of Florida (Miami); the Fata case is U.S. v.
Farid Fata, 13-cr-20600, U.S. District, Court Eastern District
of Michigan (Detroit).

To contact the reporters on this story:
Caroline Chen in New York at
cchen509@bloomberg.net;
Sophia Pearson in federal court in Philadelphia at